New research: Informal style makes entrepreneurs more credible
“Entrepreneurs often dress differently, with a more relaxed style. Our hypothesis was that, unlike in other business contexts where formal clothing signals professionalism and inspires trust, something else is important here: being perceived as genuine and authentic,” explains Joakim Wincent, professor of entrepreneurship and management at Hanken School of Economics.
Together with Henrik Wesemann Lekkas from IE Business School, Torben Antretter from the University of St. Gallen, Vangelis Souitaris from Bayes Business School, and Dean Shepherd from the University of Notre Dame, Wincent has published his research in the Journal of Management.
The findings are based on three studies with different samples of investors and entrepreneurs. Informal dress is defined by the researchers as, for example, hoodies, T‑shirts, jogging bottoms and trainers, in contrast to formal dress such as suits, ties or skirt suits.
Wincent notes that entrepreneurship differs from other types of investment because capital is committed early, under great uncertainty and with difficulty in assessing success. It is often based on optimistic projections with little data, and in such cases the investor must feel that the entrepreneur is genuine.
“In contexts such as Slush or other pitching events, where uncertainty is very high, our research shows that the first impression can be decisive.”
According to Wincent, the research may be of interest to investors, as many believe themselves to be unaffected by cognitive shortcuts.
“In reality, the first impression – and thus clothing – plays a major role. We show that the key is to signal authenticity, which, to our surprise, even outweighs formal qualifications and experience. Factors that are otherwise crucial can therefore disappear already in the initial evaluation.”
Wincent points out that for entrepreneurs this means that clothing can in fact influence how they are perceived.
“Our research shows that early and subtle social signals can have consequences far beyond the first meeting between investors and entrepreneurs. It is important to keep this in mind. They affect which ideas receive funding, which in turn shapes the conditions for innovation, entrepreneurship and, ultimately, economic development,” says Wincent.
Text: Jessica Gustafsson